SAT PAL ( 1 ) THIS is a suit for recovery of a sum of Rs. 2,95,957. 20 together with pendente lite and future interest @ 18% p. a. with quarterly rests. ( 2 ) THE facts of the case briefly stated are that the plaintiff is a Banking Company constituted under the Banking Companies (Transfer and Acquisition of undertakings) Act, 1970 with its Head Office at Bangalore in the State of Karnataka and its branches spread all over India. Shri Devinder Kumar Manchanda is the Principal Officer and Manager of a Branch of the plaintiff Bank situated at Mehrauli, New Delhi. He is duly authorised to sign and verify the present plaint and to institute the present suit. In this regard he holds the power of attorney from the Plaintiff Bank. ( 3 ) THE present suit relates to what was previously known as Lakshmi Commercial Bank Limited. In pursuance of Central Government notification dated 23rd August, 1985 issued under Section 45 (7) of me Banking Regulation Act, 1949 the entire undertaking of me Lakshmi Commercial Bank Limited was transferred and vested in the Canara Bank (plaintiff) as the corresponding new Bank for the Lakshmi Commercial Bank as specified in the said notification w. e. f. 24. 8. 85. ( 4 ) THE defendant No. 1 is a partnership firm with defendants 2 and 3 as its partners and carries on the work of construction etc. The defendant No. 4 is the guarantor of the various loans and facilities availed of by the defendant No. 1 from the Plaintiff Bank. ( 5 ) AS per averments made in the plaint, defendant No. 1 through defendants 2 and 3 approached the plaintiff Bank and opened a current A/c. No. 133 on 30th September, 1983. The defendant No. 1 through defendants 2 and 3 requested the plaintiff Bank to issue various Bank guarantees in favour of Delhi Development Authority (in short D. DA ). Pursuant to this request, the plaintiff Bank sanctioned Bank guarantee of Rs. 1,20,000. 00 @ 1% per annum commission in favour of the D. DA. with 15% margin in the shape of F. D. R. for a period of one year and on the personal guarantee of defendant No. 4 vide sanction letter dated 28. 12. 83. The plaintiff Bank also issued Bank guarantee No. GDK/bm/bc/31/83/879/83 dated 30. 12. 83 for Rs. 97,000. 00 @ 1% per annum commission in favour of the D. DA. with 15% margin in the shape of F. D. R. for a period of one year and on the personal guarantee of defendant No. 4 vide sanction letter dated 28. 12. 83. The plaintiff Bank also issued Bank guarantee No. GDK/bm/bc/31/83/879/83 dated 30. 12. 83 for Rs. 97,000. 00 in favour of the D. DA on behalf of defendant No. 1 for a period of one year. The said guarantee was extended from time to time on me request of me defendant No. 1 and me D. DA Defendant No. l deposited fixed deposit receipt for Rs. 51,000. 00 as security towards the margin money for the grant of said Bank Guarantee. ( 6 ) IT is further averred in the plaint that pursuant to a request letter dated 19. 8. 89 submitted by we defendant No. 1 through defendants 2 and 3, the plaintiff Bank sanctioned a Cash Credit limit of Rs. 40,000. 00 with interest @ 18% p. a. against hypothecation of stock of building material shuttering material and machinery with 14% margin additionally secured by the personal guarantee of defendant No. 4 vide sanction letter dated 26. 9. 84. In consideration of the said grant of Cash Credit limit of Rs. 40,000. 00, the defendant signed and executed various documents, namely, agreement for Cash Credit/over draft dated 22. 9. 84, a demand pronote dated 22. 9. 84 for Rs. 40,000. 00 as collateral security, letter of waiver dated 22. 9. 84, letter dated 22. 9. 84 on From No. 42-A, all signed and executed by defendants 2 and 3 for themselves and on behalf of defendant No. 1. It is also alleged that in terms of the above mentioned demand Pronote dated 2z9. 84 the defendants had agreed to pay interest @ 8% p. a. over the Reserve Bank of India rate subject to minimum rate of interest of 18% p. a. from the date of pronote to date of payment in full with quarterly rests. It is also stated in the plaint that defendants 1 to 3 duly availed of all the said cash credit facilities granted by the plaintiff Bank. They, however, failed to clear the outstanding liability in the A/c. within the stipulated period. It is also stated in the plaint that defendants 1 to 3 duly availed of all the said cash credit facilities granted by the plaintiff Bank. They, however, failed to clear the outstanding liability in the A/c. within the stipulated period. ( 7 ) IT is further alleged in the plaint that the plaintiff Bank requested the defendants to clear the outstanding liability vide letters dated 11. 4. 85, 24. 8. 85, 10. 11. 85, 2. 1. 86, 7. 2. 86, 19. 4. 86 and 26. 4. 86, but the defendants failed to clear the outstanding liability. Thereafter a legal notice dated 14. 2. 88 was served on the defendants, but still they failed to clear outstanding liability. ( 8 ) IT is further alleged in the plaint that the Bank guarantee for Rs. 97,000. 00 issued on behalf of the defendants 1 to 3 in favour of defendants, was invoked by the beneficiary and the plaintiff Bank honoured the said bank guarantee on 17. 9. 87. The fixed deposit receipts of Rs. 51,000. 00 were adjusted and a credit of Rs. 59,761. 80 was given to the defendants and after giving the said credit, an amount of Rs. 37,238. 20 was due and outstanding from the defendants to the plaintiff Bank as on the date of filing of the suit. It is further stated in the plaint that besides the said amount of Rs. 37,238. 20 a sum of Rs. 2,58,719. 00 inclusive of interest upto the date of filing of the suit as per Reserve Bank of India directives issued from time to time is also due and outstanding from the defendants to the plaintiff Bank. It is further alleged that the defendants are jointly and/or severally liable to pay amount due and outstanding to the Bank, but they have failed to pay the said amount inspite of repeated requests and legal notice. Hence the present suit has been filed far Rs. 2,95,957. 20 together with pendente lite and future interest as stated hereinabove. ( 9 ) DEFENDANTS 1 to 3 were served through substituted service and since despite service the said defendants failed to appear, they were proceeded against ex-parte vide order dated 15th February, 1989. Defendant No. 4 appeared in person at the initial stage. However, he did not file any written statement though he was given various opportunities. ( 9 ) DEFENDANTS 1 to 3 were served through substituted service and since despite service the said defendants failed to appear, they were proceeded against ex-parte vide order dated 15th February, 1989. Defendant No. 4 appeared in person at the initial stage. However, he did not file any written statement though he was given various opportunities. From 9th August, 1988; he started absenting himself and finally vide order dated 15. 2. 89 he was also proceeded against ex-parte. Vide order passed on 29th January, 1990, the plaintiff was permitted to,lead evidence by filing affidavits. Accordingly, the plaintiff Bank has filed affidavits by way of evidence duly and sworn by Shri V. K. Kumar (Public Witness-1) at present working as an officer in the Divisional Office of the Plaintiff Bank at Agra, who was working as a Manager in the Lakshmi Commercial Bank, Mehrauli from 1982 to 1985, Shri Ravi Sethi (Public Witness-2) at present working as Manager of Kashmere Gate, Delhi branch of the Plaintiff Bank and who had worked as anofficer in the Lakshmi Commercial Bank, Mehrauli Branch from 1985 to December, 1985 and Shri Balbir Chand at present Senior Manager, Gwalior Branch of the plaintiff Bank and who was the Branch Manager in the Mehrauli Branch of the Plaintiffs Bank from December, 1985 to July, 1987 and Shri Davinder Kumar Manchanda, at present Senior Manager of Malviya Nagar Branch of the Plaintiff Bank and who was Manager of the Mehrauli Branch of the plaintiff Bank from August, 1987 to July, 1991. All the averments and allegations made in the plaint have been proved through fee aforesaid four witnesses. ( 10 ) EX. PUBLIC Witness 1/1 is the A/c. Opening Form of Current A/c. No. 133 which has been duly signed by defendant Nos. 2 and 3 for and on behalf of defendant No. 1 as partners of defendant No. 1. Ex. Public Witness 1/2 is the specimen signature card duly signed and executed by defendants 1 to3. Ex. Public Witness. 1/3 is the sanction letter dated 28. 12. 83 by which the Lakshmi Commercial Bank Limited sanctioned issue of a Bank guarantee for Rs. 1,20,000. Ex. Public Witness 1/2 is the specimen signature card duly signed and executed by defendants 1 to3. Ex. Public Witness. 1/3 is the sanction letter dated 28. 12. 83 by which the Lakshmi Commercial Bank Limited sanctioned issue of a Bank guarantee for Rs. 1,20,000. 00 in favour of D. D. A on behalf of defendants 1 to 3 with Commission @ 1% p. a. with 50% margin in the shape of F. D. R. for a period of one year and on the personal guarantee of defendant No. 4. Ex. Public Witness 1/4 is the office copy of the Bank guarantee No. GKD/bm/bc/31/83/879/83 dated 30. 12. 83 for Rs. 97,000. 00 in favour of D. D. A. on behalf of defendant No. 1. Ex. Public Witness 1/5 is the forwarding letter dated 19th September, 1984 with which the loan application form was submitted by the defendants. Ex. Public Witness 1/6 is the loan application Conn duty signed by defendants 2 and 3 as partners of defendant No. 1 and also duly signed by defendant No. 4 as guarantor for the credit facilities. Ex. Public Witness 1/7 is the sanction letter dated 26. 9. 84 by which the plaintiff Bank sanctioned a cash credit limit of Rs. 40,000. 00 to the defendants 1 to 3 with interest @ 18% p. a. against hypothecation of stock of building material, shuttering material and machinery with 40% margin additionally secured by the personal guarantee of defendant No. 4. Ex. Public Witness 1/8 is the agreement for Cash Credit/overdraft dated 22. 9. 84 duly signed and executed by defendants 1 to 3. Ex. Public Witness 1/9 is the demand Pronote dated 22. 9. 84 for Rs. 40,000. 00 duly signed by defendants 2 and 3 for themselves and on behalf of defendant No. 1. Ex. Public Witness 1/10 is the letter dated 22. 9. 84 with which the said pronote was delivered to the Bank. Ex. Public Witness 1/11 is the letter of waiver dated 22. 9. 84 duly signed by defendants 1 to 3 Ex. Public Witness 1/12 is the letter dated 22. 9. 89 on form No. 42-A wherein defendants 1 to 3 had agreed to adjust the loan amount within three months from 22. 9. 84. Ex. Public Witness1/13 is the statement dated 13. 10. 9. 84 duly signed by defendants 1 to 3 Ex. Public Witness 1/12 is the letter dated 22. 9. 89 on form No. 42-A wherein defendants 1 to 3 had agreed to adjust the loan amount within three months from 22. 9. 84. Ex. Public Witness1/13 is the statement dated 13. 10. 84 duly signed and executed by defendants 2 and 3 for themselves and on behalf of defendant No. l wherein defendants gave details of the machinery and the stocks hypothecated/pledged infavour of the plaintiff Bank. Ex. Public Witness 1/14 is the letter dated 20. 10. 84 wherein defendants 1 to 3 requested the Lakshmi Commercial Bank Ltd. to renew the Bank guarantee for a further period of one year. All these exhibits haw been proved by Shri V. K. Kumar (Public Witness-1 ). This witness has also proved mat defendants 1 to 3 availed of the cash credit facility and thereafter defaulted in honouring the commitments regarding advances made to them. ( 11 ) EXS-PUBLIC Witness 2/1, Public Witness2/2 and Public Witness 2/3 are the copies of me notification dated 23rd August, 1985 issued by the Government of India in terms of which all the assets and liabilities of the Lakshmi Commercial Bank Limited were taken over by the Plaintiff Bank w. e. f. 24. 8. 85. Ex. Public Witness 2/4 is the letter dated 11. 4. 85 by which the defendants were requested to clear the outstanding liabilities. Ex. Public Witness 2/5 is the letter dated 24. 8. 85 wherein the plaintiff Bank informed the defendants about the take over of the Lakshmi Commercial Bank Ltd. by the plaintiff Bank. Ex. Public Witness 2/6 is the letter dated 10. 11. 85 wherein the plaintiff Bank requested the defendants to clear the outstanding liabilities. All the exhibits mentioned in this para have been proved by Shri Ravi Sethi, Public Witness-2. ( 12 ) EX. PUBLIC Witness 3/1, Public Witness 3/2 and Public Witness 3/3 are the letters dated 2. 1. 86, 7. 2. 86 and 19. 4. 86 sent by the plaintiff bank to the defendants to clear the outstanding liability. Ex. 3/4 and Public Witness 3/5 are the letters dated 21. 4. 86 by which the defendants requested the plaintiff Bank to renew the bank guarantee in favour of the D. D. A and also promised to clear the outstanding amounts. Ex. 86 and 19. 4. 86 sent by the plaintiff bank to the defendants to clear the outstanding liability. Ex. 3/4 and Public Witness 3/5 are the letters dated 21. 4. 86 by which the defendants requested the plaintiff Bank to renew the bank guarantee in favour of the D. D. A and also promised to clear the outstanding amounts. Ex. Public Witness 3/6 is the letter dated 26. 4. 86 by which the plaintiff asked the defendants to clear the outstanding liability. Ex. Public Witness 3/7 is the letter dated 13. 8. 86 by which the defendant No. 1 informed the plaintiff Bank that they had shifted its office to B-202, Priyadarshani Vihar, Delhi-110092. Ex. Public Witness 3/8 is the letter dated 5. 12. 86 by which the Bank guarantee for Rs. 97,000. 00 was invoked by the D. D. A. Ex. Public Witness 3/9 is the copy of the legal notice dated 14. 2. 87 which was sent by the plaintiff Bank to the defendant to clear the outstanding liability. Ex. Public Witness3/10 is the letter dated 6. 3. 87 by which D. D. A reminded the plaintiff Bank to pay the amount of bank guarantee. Ex. Public Witness 3/11 is the letter dated 27. 4. 87 sent by the plaintiff Bank to the defendants to clear the outstanding liability. All the exhibits mentioned in this para have been proved by Shri Balbir Chand, Public Witness-3. ( 13 ) EX. PUBLIC Witness4/1 is the authenticated copy under the Bankers Books Evidence Act of the Bank guarantee Account of the defendants in the books of the plaintiff Bank, showing a sum of Rs. 37,238. 20 as due and outstanding from the defendants. Ex. Public Witness 4/2 is the authenticated copy under the Bankers Books Evidence Act of the Cash Credit Account of the defendants in the Books of the plaintiff Bank showing a sum of Rs. 2,58,719. 00 as due and outstanding from the defendants which is inclusive of interest. Ex. Public Witness 4/3 is the photo copy of the power of attorney dated 12. 6. 86 and Ex. Public Witness 4/4 is the photo copy of the supplement power of attorney dated 14. 6. 90 executed by the plaintiff Bank and favour of Shri Devinder Kumar Manchanda, Sr. Ex. Public Witness 4/3 is the photo copy of the power of attorney dated 12. 6. 86 and Ex. Public Witness 4/4 is the photo copy of the supplement power of attorney dated 14. 6. 90 executed by the plaintiff Bank and favour of Shri Devinder Kumar Manchanda, Sr. Manager of the Plaintiff Bank authorising him to institute the suit and sign and verify the pleadings on behalf of the plaintiff Bank. All the exhibits mentioned in this para have been proved by Shri Devinder Kumar Manchanda Public Witness-4. This witness has also proved that the defendants are liable to pay interest as per the directives issued by the Reserve Bank of India from time to time, at present being 18% p. a. with quarterly rests. ( 14 ) AS stated hereinabove, all the defendants were proceeded against ex-parte. None of the defendants has filed any written statement controverting the averments and allegations made in the plaint nor any witness has been examined by any of the defendants to rebut the averments made in the plaint and supported by the affidavits of the Bank. The plaintiff Bank, however, has proved all the averments made in the plaint by evidence of P 1 to Public Witness 4. Hence the plaintiffs are entitled to succeed in the suit. Accordingly, the suit for recovery of Rs. 2,95,957. 20 is hereby decreed with costs in favour of the plaintiff and against the defendants. The plaintiff shall be entitled to pendente lite and future interest @ 18% per annum with quarterly rests. Decree may be drawn accordingly.